IT gap affects public's view of government

Jun. 13, 2010 - 06:00AM
|

What is driving the skepticism so many of us have about government? One important reason is that over the years, Americans have seen huge advances in efficiency and technology both at work and in their daily lives.

They have witnessed the movement from one-size-fits-all, mass production and secretarial pools to the age of just-in-time, customized manufacturing and instant communications. Organizations outside government have experienced impressive advances in productivity and have become more responsive to their customers.

The government, however, has not kept pace.

Let's look at the facts.

Public-sector productivity growth matched the private sector's until about 1987. But something changed in the late 1980s. From 1987 until 1995, private-sector productivity rose by an average of 1.5 percent a year. Meanwhile, the public sector's productivity rose by only 0.4 percent per year — or about one-third as much — over roughly the same period.

At that point, reliable data on public-sector productivity are not available because the Bureau of Labor Statistics ... stopped collecting the numbers.

The best analysis we have, from the McKinsey Global Institute, suggests that since 1995 it appears that the public sector continued to fall behind the private sector, which saw productivity surge during that period.

Some of this has to do with advances in management techniques in the private sector. Some has to do with challenges the federal government has in attracting and hiring top talent.

But I believe that the biggest driver of this divide is the information technology gap.

At one time, a federal worker went to the office and had access to the most cutting-edge computer power and programs. Now, he often has more of both in a device clipped to his belt.

Closing the IT gap is perhaps the single most important step we can take in creating a more efficient and responsive government.

Indeed, the IT gap is the key differentiator between our effort to modernize and reform government and those that have come before.

While it would be better if we did not find ourselves in this position, note that because the gap is so big, the potential upside is substantial. Our shortcomings in IT may ironically give us a "late-mover advantage," by allowing us to leapfrog costly, less-developed technologies and go directly to less-expensive, more-powerful ones.

How big is this IT gap? It is hard to quantify, but anecdotally the data are telling.

Let's consider the divergence in data center usage. In the private sector, IBM has reduced the number of data centers it uses from 235 to 12. Hewlett-Packard has consolidated 14 data centers into one, reducing energy usage by 40 percent.

What about the federal government? Since 1998, we have gone from 432 data centers to more than 1,100.

In the conversations we had with CEOs in January, most told us that they terminate a substantial number of bad IT projects soon after they start. High-performing companies kill roughly one out of every three IT projects in their first six months. The federal government, by and large, terminates almost none.

For example, the Census Bureau awarded in 2006 a $595 million contract to develop a hand-held computer for census workers to use this year. Two years and $600 million later, the project was canceled with nothing to show for it.

And census workers out there today still use pen and paper.

Clearly, we have massive room for improvement. Pursuing that improvement and closing the IT gap will help us create a government that is more efficient and less wasteful, and that is ... more responsive to the American people.

———

Peter Orszag is director of the Office of Management and Budget. Above are edited excerpts of a June 8 speech delivered to the Center for American Progress.